The business cycle phenomenon, the recurring alternations of boom and bust with which we have become all too familiar, cannot occur in a free and unhampered market. Expansion of bank money causes an artificial lowering of the rate of interest, and an artificial and uneconomic overinvestment in capital goods: machinery, plant, industrial raw materials, construction projects. As long as the inflationary expansion of money and bank credit continues, the unsoundness of this process is masked, and the economy can ride on the well-known euphoria of the boom; but when the bank credit expansion finally stops, and stop it must if we are to avoid a runaway inflation, then the day of reckoning will have arrived. For without the anodyne of continuing inflation of money, the distortions and misallocations of production, the overinvestment in uneconomic capital projects and the excessively high prices and wages in those capital goods industries become evident and obvious. It is then that the inevitable recession sets in, the recession being the reaction by which the market economy readjusts itself, liquidates unsound investments, and realigns prices and outputs of the economy so as to eliminate the unsound consequences of the boom. The recovery arrives when the readjustment has been completed.

Increased production of trade does not “require” or call forth an increase in bank money. The causal chain is the other way round: increased bank note issue raises the money supply and prices, and also the nominal money value of the goods being produced. Bank money or government money, whether as tangible notes or demand deposits, is an increase in the effective money supply virtually out of thin air.
A “free market” also means no government interference whatever in the economy. It means that private individuals and firms are free to earn money and profits, and that they are also free to lose. There can be no genuine freedom to choose without a corollary freedom to lose. No firm may be considered “too big to fail.” And so a free market in money necessarily means the abolition of central banking and of so-called deposit “insurance.” Banks must be free to fail.

Bankers are inherently inclined toward statism. Commercial bankers, engaged as they are in unsound fractional reserve credit, are, in the free market, always teetering on the edge of bankruptcy. Hence they are always reaching for government aid and bailout. @Eternal's idea is interesting and worth analysing.

Issuing promises to pay on demand in excess of the amount of goods on hand is simply fraud, and should be so considered by the legal system. For this means that a bank issues “fake” warehouse receipts — warehouse receipts, for example, for liters of kergon that do not actually exist in the vaults. This is legalized counterfeiting; this is the creation of money without the necessity for production, to compete for resources against those who have produced. In short, I believe that fractional-reserve banking is disastrous both for the morality and for the fundamental bases and institutions of the Novean market economy.
Fractional-reserve banks, especially when organized under a central bank, can and do create and then destroy money, distorting and impoverishing the Novean and the economy in their wake.
I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud from any source a 100 percent kergon standard. This is the only system compatible with the fullest preservation of the rights of property. It is the only system that assures the end of inflation and, with it, of the business cycle.

When there is collateral it is meaningless/nonsense to worry about scam and to look trustworhty people. There is no trustworthy people, there wasn't, and there won't. @CrystalEmperor's system of banking is an original/unique free-market idea and can be useful for all Noveans. The free-market economy, as complex as the system appears to be on the surface, is yet nothing more than a vast network of voluntary and mutually agreed upon two-person or two-party exchanges of property titles by the support of collateral as an insurance for the buyer.

Determining the supply of money, like all other goods, is best left to the free market. Aside from the general moral and economic advantages of freedom over coercion, no dictated quantity of money will do the work better.

Economic theory and history both tell us that maintaining a cartel, for any length of time, is almost impossible on the free market, as the firms who restrict their supply are challenged by cartel members who secretly cut their prices in order to expand their share of the market as well as by new producers who enter thefray enticed by their higher profits attained by the cartelists.
In addition to this, one cartel or one firm could not own all the means of production in the economy, because it could not calculate prices and allocate factors in a rational manner.

yeah griefing:
Also, security of a free market society, survivability would be a better word here; mostly depends on business partners, especially strong and influental organizations will give better support/help than any private military or security services. So, making good trading connections with other organizations will be vital to any society no matter if it is a totalitarian state or ancap society.

There is nothing wrong to apply market or transaction fees, it is like commissions paid to a broker in real life trading. But taxes on profits is not a good idea.
About security; in a wealthy ancap society (with skyscrapers, banks with large sums of tungsten in the vaults, etc.), large-scale property owners would carry large insurance policies on their assets. This would probably include indemnification in the event of a foreign military attack/confiscation. Thus it would be enormous insurance companies who would “internalize the externalities” of military defense. Beyond obvious measures such as funding the deployment and maintenance of an antiballistic missile system, these insurance companies might also post bounties for various targets in the event of a foreign invasion.

Thoughts﻿﻿ on﻿ Myriad F﻿ree Market﻿ and Its S﻿ecurity (﻿Pa﻿rt﻿ ﻿﻿﻿II):
Three pillars of free market are high liquidity (high volume), security (provided by insurance companies and private security enterprises) and taxfree. Frankly, Dual Universe metaverse will be totally chaotic environment where courts or law has no meaning at all. Anarchy rules. Period.
Don't get me wrong and please don't confuse the word of chaos with anarchy. There is no accepted meaning to the word “anarchism” itself. The average person may think he knows what it means, especially that it is bad, but actually he does not. One very popular charge against anarchism is that it “means chaos.” anarchists have always believed that the establishment of their system would eliminate the chaotic elements now troubling the world. The root of the word comes from the term anarchos, meaning opposition to authority or commands.
If every Myriad citizen has the absolute right to his justly-held property it then follows that he has the right to keep that property — to defend it by violence against violent invasion. Furthermore, if every citizen has the right to defend his person and property against attack, then he must also have the right to hire or accept the aid of other people to do such defending: he may employ or accept defenders just as he may employ or accept the volunteer services of gardeners on his lawn.
(Note: Absolute pacifists who also assert their belief in property rights are caught in an inescapable inner contradiction: for if a man owns property and yet is denied the right to defend it against attack, then it is clear that a very important aspect of that ownership is being denied to him. To say that someone has the absolute right to a certain property but lacks the right to defend it against attack or invasion is also to say that he does not have total right to that property.)